Creditors of Energy Future Holdings Corp., taken private in the biggest leveraged buyout on record, will keep negotiating on a restructuring plan after one group left the confidential talks, according to a regulatory filing.
Outlines of three unadopted creditor proposals were included in the filing. Creditors of subsidiary Energy Future Intermediate Holding Company LLC left the talks while directing “their advisors to continue to work with the companies and their advisors to explore further whether the parties can reach an agreement on the terms of a consensual restructuring,” the filing showed.
Lenders including a group of first-lien holders in the deregulated Texas Competitive unit are continuing negotiations, and extended non-disclosure agreements that expired yesterday. The confidentiality contracts allow investors to access private information about Energy Future and their debt positions to facilitate talks.
Creditors are seeking to reach terms on a bankruptcy filing that may come this month, according to people familiar with the talks, who asked not to be named because the process is private. Lenders are divided over how much of Energy Future’s $43.6 billion in debt will be extinguished, and how lenders will carve up ownership of the Texas power company, the people said. Energy Future is due to make about $270 million in interest payments Nov. 1 -- cash more senior creditors want the company to retain by filing for bankruptcy.
Texas’s largest electricity provider has struggled to reduce debt since it was taken over in a $48 billion deal in 2007 led by KKR & Co. (KKR), TPG Capital and Goldman Sachs Capital Partners. The leveraged buyout left Energy Future with more than $40 billion in debt in an unsuccessful bet natural gas prices would rise.